Stakeholder Experiences with New Markets Tax Credit Investments in Indian

The authors find that the annual share of NMTC investments for tribal entities increased nearly fivefold between the first 10 years and the last nine years of the program, for a total investment of $598 million. [...] Consultation and legal fees, added to the discounted price the investor pays for the right to claim the tax credit, can reduce the amount of capital left in the project by 35 to 50 percent after the seven-year compliance period.5 As a result, small, minority-led CDEs, including Native CDEs, might refrain from 5 New Markets Tax Credit: The Credit Helps Fund a Variety of Projects in Low-Income Commu. [...] Parties involved need to get a better understanding of the necessity and the impact on tribes of having to sign sovereign immunity waivers.” NMTC staff at a non-Native CDE suggested that for a smoother process, all the tribes could provide a limited waiver of sovereign immunity so that the contracts could be enforced in local or state government to incentivize private investment in these transacti. [...] In a NMTC structure, banks are “happy to invest about 25 percent of the total cost, leaving the borrower to monetize the rest of the deal using debt.” In most deals this organization has done, the debt comes from the tribe’s general fund. [...] The CDFI Fund could also offer to cover a portion of the CDE fees to be collected by minority or Native CDEs. Every CDE has their own fees, and assuming the fees amount to 4 percent of total project cost, the CDFI Fund would offer a 2 percent fee subsidy so it can be passed to the project and deliver a lot more benefits.”  8 One Native CDE manager expressed that he’d like the NMTC Program to opera.